Stokes Wagner Law Firm
Stokes Wagner

As employer-provided rideshares and shuttles grow in popularity, employers often ask whether their employees should be paid for their time spent on company-provided transportation. A California appellate court recently affirmed a long-standing rule that, so long as the employer-provided shuttle is optional, the time spent on a company-provided vehicle does not count as “hours worked” and is not compensable.

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Senate Bill 970, signed into law by Governor Jerry Brown on September 27, 2018, will require employers in the hotel and/or motel industry to educate their employees on human trafficking awareness.

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San Francisco implemented critical amendments to its “Ban-the-Box”, or “Fair Chance Ordinance” (“FCO”). These amendments went into effect on October 1, 2018.

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On September 30, 2018, Governor Jerry Brown signed a number of bills that will have a major impact on businesses operating in California.

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In the wake of the recent Las Vegas shooting and the rise of the #MeToo movement, concerns about safety in the hospitality space are at an all-time high. The American Hotel & Lodging Association (“AHLA”) recently re-emphasized its dedication to these issues through its announcement of the 5-Star Promise in September 2018. Most notably, major hotel brands including Hilton, Hyatt, IHG, Marriott, and Wyndham, have publicly shown their support for the Promise and its goals.

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In April 2018, Governor Cuomo of New York signed a set of laws aimed at combating sexual harassment in the workplace. New York employers must (1) provide all employees with written policies describing employee protections against sexual harassment and (2) conduct annual sexual harassment prevention trainings with all employees.

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Last week the Ninth Circuit filed its en banc opinion by the Ninth Circuit in Marsh v. J. Alexander’s LLC, No. 15-15791, 2018 WL 4440364 (9th Cir. Sept. 18, 2018). In this case, the full Ninth Circuit overturned previous panel and district court decisions and upheld the U.S. Department of Labor’s “20%” rule for tipped employees.

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This week, HotelExecutive.com published an article by our own John Hunt and Ashley Nunneker, covering the nuanced differences between different types of compensation for hotel and restaurant servers. Check it out on their website! And if this thorough review doesn’t quite clarify everything you’re wondering about gratuities and service charges, contact Stokes Wagner with any questions you might have!

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On Tuesday, the Bureau of Consumer Financial Protection published a new version of the “Summary of Your Rights Under the Fair Credit Reporting Act”. This version must be provided to job applicants when conducting employment background checks pursuant to the Fair Credit Reporting Act (“FCRA”). The revised Summary of Rights alerts applicants to their right to obtain a free national “security freeze”, which prohibits credit reporting agencies from releasing a person’s credit report without their consent.

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Hospitality guests have historically used gratuity to acknowledge their service staff’s excellent work. Employees have come to expect and rely on gratuities, as they now often form the majority of their incomes. Restaurants also sometimes charge guests mandatory fees instead of, or in addition to, gratuity. Yet employers often mislabel, mishandle and commingle gratuities and service charges, which can have serious legal implications. Understanding the differences between a gratuity and a service charge is critical. Below, we demystify these payments and explain how to limit your exposure through best practices.

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The Social Security Administration (“SSA”) has announced, effective January 2019, it will begin enforcing penalties against employers who file Form W-2s with inaccurate employee information.

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On June 6, 2018, the NLRB’s new General Counsel, Peter B. Robb, issued guidance regarding the Board’s current policies on Employee Handbooks, expanding on the Board’s recent decision in The Boeing Company, 365 NLRB No. 154 (Dec. 14, 2017), and taking a more employer-friendly approach.

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Significant amendments to New York City’s Earned Safe and Sick Time Act (“ESTA”) went into effect on May 5, 2018. ESTA generally provides employees with the ability to use accrued paid time off for personal purposes. This paid time off (or, “paid sick leave”) can be used by employees to care for themselves or to care for family members.

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New York City recently signed the “Stop Sexual Harassment in NYC Act” into law. The Act amends the New York City Human Rights Law (“NYCHRL”) and the New York City Charter, providing several noteworthy changes aimed at preventing sexual harassment in the workplace.

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Oregon’s “Fair Work Week Act” requires covered employers to provide employees with advanced notice of their work schedules. The new law applies to employers in the large retail, food service and hospitality industries with more than 500 employees worldwide and at least one or more hourly employees working in the State of Oregon.

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Recent amendments to Seattle’s Paid Sick and Safe Time (PSST) ordinance make it even more comprehensive and inclusive. The law provides employees of eligible employers with paid sick time as well as “safe” time to deal with situations such as domestic abuse or sexual assault, or closure of work or school for any health-related reason.

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Starting August 30, 2018, California hotels must display additional signs warning guests of chemicals that can cause cancer, birth defects, or other reproductive harm.

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California hotels must display a human trafficking notice in a visible location near the public entrance or in another conspicuous location in clear view of the public and employees where similar notices are customarily posted.

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To further create workplaces free of sexual harassment and discrimination, California’s Fair Employment and Housing Act (“FEHA”) has expanded regulations to require employers to honor an individual’s gender identity, provide gender-neutral facilities, and display posters informing employees of transgender rights. The most notable amendments to the regulations go into effect July 1, 2017.

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The California Employment Development Department (EDD) recently updated its Notice to Employees poster (DE 1857A) and its pamphlet, For Your Benefit: California’s Program for the Unemployed (DE 2320).

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The #MeToo movement has prompted many state and local governments to expand protections prohibiting discrimination. Two months ago, the Illinois General Assembly passed a series of amendments to the Illinois Human Rights Act, which forbids discrimination in connection with any protected class. If signed into law, the amendments could significantly impact employers.

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Historically, employers have not been on the hook for paying employees for time that was de minimis, or in other words, hard to capture in a time system and administratively difficult to record. However, that just changed with the decision in the California Supreme Court case, Troester v. Starbucks, Corp.

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If you are considering settling your employee’s workers’ compensation claim and hoping to avoid further litigation, be aware of the Adrian Camacho v. Target Corporation decision by California’s Fourth District Court of Appeal.

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Just last month, the General Data Protection Regulation (“GDPR”) came into existence. GDPR is the legal framework establishing the guidelines for collection and processing of personal data of individuals in the European Union (“EU”) and the rights of the individuals with regard to such data. The GDPR requires businesses to be much more explicit about the information they maintain on people and to provide them with more control over that information. While European businesses may have been planning for the GDPR for some time, many U.S. companies are unprepared with no plans in place to comply. However, the long arm of the GDPR might apply to them.

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California’s Division of Occupational Safety and Health (“Cal-OSHA”) has approved new regulations to prevent workplace injuries to those working in the housekeeping and hospitality industry.

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The City of Los Angeles announced its Citywide Hotel Worker Minimum Wage increase, which applies to hotels in the City of LA with 150 or more rooms.

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Today, the Supreme Court issued a 5-4 decision holding that employers are not violating the National Labor Relations Act by requiring employees to sign class action waivers in arbitration agreements as a condition of their employment. Rejecting the NLRB’s position that class waivers violate a workers’ right to engage in concerted action, the majority held that mandatory arbitration agreements, which bar employees from joining together in a class-action lawsuit to settle disputes over wages and working conditions, must be enforced.

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Determining whether a worker is properly classified as an employee or independent contractor can be difficult. California recently made this determination less challenging by providing a more rigid test.

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In 2011, the U.S. Department of Labor (“DOL”) introduced regulations affirming that tips are the property of the employee regardless if the employer uses a tip credit under the FLSA. Under this framework, only “customarily tipped employees” can receive distributions from a company tip pool. Tip pools set up by employers to include employees who are not regularly tipped employees are invalid. This limitation applies even where the employees contributing to a tip pool are paid the applicable minimum wage. Moreover, employers and management staff are precluded from receiving any portion of tip pools under the current regulation. The 2011 regulation has led to voluminous litigation over what constitutes a “customarily tipped employee” and has resulted in inconsistent rulings from various courts.

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The newest trend in Americans with Disabilities Act (“ADA”) lawsuits target businesses’ websites. Litigants have increasingly sued or threatened to sue under Title III, alleging that the website is not sufficiently accessible to the disabled (i.e., the website lacks assistive technology for individuals who are blind or hearing-impaired).

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The National Labor Relations Act (NLRA) protects the employee right to engage in “concerted activities for the purpose of . . . mutual aid or protection.” This includes not only the right to support a union, but also simply the right of employees to converse among themselves on issues affecting their employment. Consequently, any workplace rule explicitly infringing on this right, as well as any rule applied so as to cause such infringement, can be held unlawful. For example, if employees regularly get together before or after work, during which gripes and grievances (or unions) can be discussed, a workplace rule restricting these gatherings will generally be held unlawful.

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The #METOO movement took social media by storm in October 2017 as a means of illustrating the prevalence of sexual assault, harassment, and misconduct, particularly in the workplace. As the conversation around the #METOO movement swirls, employers have begun to assess how the movement affects their policies. Employers should stick to a simple three-part strategy: (1) promulgate a clear policy; (2) thoroughly investigate complaints; and (3) always respond accordingly and swiftly.

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On Aril 6, 2018, the U.S. Department of Labor announced amendments to the Fair Labor Standards Act (“FLSA”) § 3(m).

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In November 2017, the Ninth Circuit (covering California, Washington, Oregon, Nevada, Hawaii, Alaska, Idaho, Arizona, Montana) decided that the Fair Labor Standard Act’s (“FLSA”) hourly minimum wage requirement applies to weekly per-hour averages rather than actual per-hour pay. This means that the appropriate way to determine minimum wage compliance under the FLSA during any workweek is by calculating the pay earned during the entire workweek, rather than the pay earned in each individual hour of the workweek.

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The 2nd Circuit, covering Connecticut, New York, and Vermont, has revived a sex bias claim brought on behalf of Donald Zarda, a deceased skydiving instructor who was allegedly fired for telling a client he was gay. As an instructor at Altitude Express, Zarda sometimes mentioned his orientation in order to help female clients feel more comfortable when jumping, as they would be tied physically close to him during jumps. Zarda was fired after a boyfriend of one female client complained to Zarda’s boss that Zarda had inappropriately touched his girlfriend and mentioned he was gay. Zarda denied anything inappropriate and alleged that his dismissal was entirely because he said he was gay.

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On-call employees of fast food chain Yoshinoya claim they are owed reporting time pay when they call in for a shift but are not put to work. A L.A. Superior Court judge recently ruled that the plaintiffs may pursue their claims. This putative class of kitchen and cashier “on-call” employees call two hours before their scheduled shift to find out whether they are needed to work. If they fail to call in or do not show up for work when needed, they may face discipline. Plaintiffs claim that they are entitled to reporting time pay when they call in but are not put to work, even though they are not required to physically report to work.

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California’s New Parent Leave Act (S.B. 63), which requires small business employers (20-49 employees) to provide employees with 12 weeks of unpaid, job-protected parental bonding leave went into effect on January 1, 2018.

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AB 450 – ICE Raids/Audits

April 30, 2018

Category: Legal Updates

California’s “Immigrant Worker Protection Act” (“AB 450”) went into effect on January 1, 2018. This Act prohibits California employers from allowing an ICE agent to search a worksite by an ICE agent without proper, legal documentation. Employers may not provide ICE agents access to employee records without a subpoena or warrant, with the exception of Form I-9’s and other documents for which the employer receives a Notice of Inspection.

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In July 2016, Santa Monica enacted two minimum wage ordinances, one specific to hotel workers (the “Hotel Workers Living Wage Ordinance”), and the other to any employees of an employer in Santa Monica (“Minimum Wage Ordinance”).

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On January 18, 2018, California’s Department of Industrial Relations Occupational Safety & Health Standards Board, approved a proposed regulation requiring hotel employers to maintain “an effective, written, musculoskeletal injury prevention program (MIPP) that addresses hazards specific to housekeeping.”

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The Trump administration has been ordered to accept new applications for Deferred Action for Childhood Arrivals (“DACA”) benefits.

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Stokes Wagner recommends that you review and update your employee handbooks annually. This article contains a list of policies and procedures for you to consider adding in your respective employee handbooks.

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Prior to 2018, the United States Department of Labor (“DOL”) had applied a rigid six-part test to determine whether interns must be treated as employees or unpaid interns. However, on January 5, 2018, the DOL announced that, in an effort to eliminate confusion and align itself with recent case law, it would adopt the “Primary Beneficiary” test to determine whether interns are employees under the Fair Labor Standards Act (“FLSA”).

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Head on over to HotelExecutive.com to read the latest article by John Hunt, covering a brief review of laws pertaining to hotel mergers and acquisitions! If that doesn’t slake your appetite for knowledge, contact Stokes Wagner at any time with your questions.

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Starting January 1, 2018, nearly all private employees in New York State will be eligible for Paid Family Leave so the employee can (1) bond with a newly born, adopted or fostered child; (2) care for a family member with a serious health condition; or (3) assist loved ones when a family member is deployed abroad on active military duty. Paid Family Leave will phase in over four years, starting at 8 weeks in 2018 and increasing to 12 weeks by 2021.

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The International Society of Hospitality Consultants (ISHC) welcomed Hayden Pace (CEO, Stokes Wagner, ALC) among twenty-four hospitality consultants qualified by their expertise and reputation in its 2017 membership class.

ISHC is the leading source for global hospitality expertise. Membership in ISHC is by invitation only, and members are viewed as leaders in their respective areas of expertise. Candidates for membership undergo a rigorous screening process, ensuring that all ISHC members have a reputation of integrity and are qualified by their experience, training and knowledge to develop and express sound judgment on industry issues.

Hayden Pace is the Chief Executive Officer of Stokes Wagner, a law firm dedicated to providing the hospitality industry with “white glove” legal services. Hayden was raised in New York and currently resides in Atlanta. He regularly lectures nationally and internationally, and has the privilege of working with hotel clients around the world.

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To better protect hotel workers against sexual harassment and assault, Chicago passed the “Hands Off Pants On” Ordinance. The Ordinance requires Hotels in the City of Chicago to adopt (1) a “panic button” system and (2) anti-sexual harassment policy.

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An amendment to the New York City Human Rights Law, effective October 31, 2017, prohibits New York City employers from considering job applicants’ salary histories. Here are the details:

The Amendment Prohibits Employers From:

  • Inquiring about an applicant’s salary history; or
  • Relying on an applicant’s salary history when making decisions about an applicant’s salary at any time during the hiring process.

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Governor Brown, Jr., recently signed five employment bills into law that affect all California employers. The following laws are effective starting January 1, 2018.

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California’s Division of Occupational Safety and Health (“Cal-OSHA”) recently increased its penalties in response to Federal OSHA’s increased penalty hikes last year.

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On Sunday, October 1, 2017, a gunman shot into a crowd of 22,000 people from his 32nd-story room in the Mandalay Bay Resort and Casino. After 11 minutes, 59 people were killed and more than 500 were injured. Whether hotels can or will respond to this tragedy with security measures capable of preventing future mass shootings remains to be seen. In the wake of this tragedy, however, hotel security practices undoubtedly will come under severe scrutiny. As many of our hospitality clients have contacted us over the past three days to discuss their security obligations, we thought this short article might prove helpful by identifying certain legal principles applicable to hotel security and by outlining several security measures hotels will likely evaluate and implement in the near future.

An Innkeeper’s Liability for Guest Safety

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On September 6, 2017, in Marsh v. J. Alexander’s, LLC, the Ninth Circuit refused deference to the United States Department of Labor’s (the “DOL”) 80/20 Rule, which interprets the “tip credit” under the Fair Labor Standards Act (“FLSA”). The Ninth Circuit held that the 80/20 Rule is inconsistent with the FLSA because the Rule improperly focuses on an employee’s individual duties, rather than an employee’s distinctive dual positions.

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The Department of Labor (DOL) has announced an intent to rescind the notorious 2011 Federal Tip-Pooling Rule, which currently prevents service-industry employers from allowing front-of-house servers to share tips with back-of-house employees (i.e., cooks and dishwashers). Under the 2011 regulation, tip-pools must only include front of house staff. Given the prevalence of tip-pooling in the service industry, the 2011 rule has been the subject of numerous legal challenges, including two petitions that are currently pending before the United States Supreme Court.

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On July 17, 2017, the United States Citizenship and Immigration Services (“USCIS”) released a revised Form I-9.

While the revised form does not change storage and retention rules, it does include subtle changes to the form’s instructions. For instance, the instructions to Section 1 have been revised to remove “the end of” from the phrase “the first day of employment.” Also, the form introduces a new name for the Department of Justice’s Office of Special Counsel for Immigration-Related Unfair Employment Practices: The Immigrant and Employee Rights Section.

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In a recent newsletter, we reported that the United States Supreme Court would decide the hotly contested issue of whether class waivers are valid in arbitration agreements sometime this year.

The Court recently announced that it would hear oral argument on the issue on October 2, 2017. Stokes Wagner will keep you informed as things progress with this hot issue.

For more legal updates, check out our update for September 2017!

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In Stragapede v. City of Evanston, Illinois, the Seventh Circuit upheld the nearly $580,000 jury verdict in favor of the former City employee. Stragapede, a 14-year veteran of the City’s Department of Water Services, suffered a traumatic brain injury at home in 2009.

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As we wrote in our June update, the Obama administration raised the minimum salary requirement for major “white collar” exemptions from $455/week to $913/week. In July 2017, the Department of Labor (“DOL”) filed its long-awaited reply brief with the 5th Circuit regarding the new minimum requirements. The DOL did not seek to reinstate the Obama’s minimum salary level. The DOL did, however, ask the Court to find that the DOL has authority to set a salary test.

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For the first time ever, the California Labor Commissioner fined a general contractor nearly $250,000 for wage and hour violations committed by its subcontractor, who had been hired for a hotel construction project in Southern California. This decision is significant for businesses that use subcontractors.

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Ever wonder if you can recover litigation costs in employment cases? On August 15, 2017, in Sviridov v. City of San Diego, the court made it clearer for employers.

Two years ago, in Williams v. Chino Valley Independent Fire Dist., the Supreme Court explained that prevailing employers in employment cases can generally only recover costs if the employee’s action was objectively without foundation – an extraordinarily high standard. However, Williams was not asked to consider and did not answer the question of whether costs may properly be awarded in a FEHA action pursuant to a Section 998 offer. That issue was before the court in Sviridov.

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Employees who sue for unpaid wages can either file (1) a civil lawsuit or (2) a wage claim with the Division of Labor Standards and Enforcement (“DLSE”). An employee who files a wage claim with the DLSE may participate in a settlement conference with his/her employer. If the case does not settle, the DLSE will set the case to an administrative hearing, known as a “Berman Hearing”. Berman Hearings are mini, informal trials with a Labor Commissioner. Berman Hearings, compared to civil lawsuits, are designed to provide a speedy, informal, and affordable method for employees and employers to resolve wage claims.

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Starting January 1, 2018, San Francisco requires employers to ensure that any space offered for lactation also includes a place to sit, a surface on which to place a breast pump and/or other personal items, access to electricity, and a nearby refrigerator in which the employee can store expressed milk. An employee’s lactation break time may be unpaid if it is not taken within or during an already-specified paid break. The Ordinance strictly prohibits retaliation against anyone who requests lactation accommodation or files a complaint with San Francisco’s Office of Labor Standards Enforcement (“OLSE”).

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Effective July 19, 2017, San Francisco became the first city in California to ban employers from asking job applicants about their salary history. This is the latest in a nationwide movement to promote gender pay equality. As cited in the San Francisco Ordinance, census data shows that women in San Francisco are paid 84 cents for every dollar a man makes, and women of color are paid even less. The ban seeks to stop the “problematic practice” of relying on past salaries to set new employees’ pay rates, which perpetuates the historic gender pay gap.

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Effective 3/13/2017, San Jose employers must offer additional hours of work to current part-time employees before agreeing to hire additional, outside workers. These current part-time employees must in “good faith and reasonable judgment” have the necessary skills and experience to perform the work. Employers are not required, however, to offer hours to part-time employees if doing so would require overtime pay.

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Local 25 Teamsters (Union) were recently acquitted of charges of conspiracy to extort and attempted extortion. In June 2014, the Teamsters allegedly slashed tires, used sexist and racist slurs, and threatened to “bash” celebrity host Padma Lakshmi’s “pretty little face in.”

Federal prosecutors accused the Union members of trying to shut down the filming if the show did not hire Teamsters to drive production vehicles. The prosecutors specifically had to prove that the Teamsters’ labor objectives, however egregious their actions, were illegitimate.

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Massachusetts recently passed the Pregnant Workers Fairness Act, which protects women from discrimination based on pregnancy, childbirth, and expressing milk. Effective April 1, 2018, it is unlawful for an employer to deny reasonable accommodations related to pregnancy, childbirth, or related conditions upon request unless the employer can demonstrate that the accommodation would impose an undue hardship on the employer.

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Employers in Massachusetts may not terminate employees who use medical marijuana in accordance with a prescription according to the Massachusetts Supreme Judicial Court’s recent ruling in Barbuto v. Advantage Sales and Marketing, LLC. Barbuto, a former Advantage employee, disclosed her medical marijuana usage at the time of her hire. Ms. Barbuto worked for only one day before she was terminated for failing the company’s mandatory drug test. The company’s drug policies followed the federal drug schedule, not local Massachusetts law. The court found for Ms. Barbuto by stating that, in terminating her employment, the company illegally discriminated against her.

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On August 5, 2017, the New York City Commission on Human Rights published final regulations which expand on and clarify the already burdensome requirements of the Fair Chance Act (“FCA”). These newly released regulations will make background checks particularly difficult for national employers and/or employers with a consolidated hiring process in multiple states.

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The City of New York enacted several bills affecting fast-food employers, effective November 26, 2017.

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We are pleased to present the Legal Update for our latest Quarter!

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San Diego shareholder and attorney Peter Maretz is making headlines in Attorney Journal San Diego! Check out his article on the Attorney Journal website for a great photograph of the firm!

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Last year, the U.S. Supreme Court issued a decision that placed restrictions on the ability of law enforcement officers to inspect hotel guest registers and other records. Many local laws, which had authorized unlimited police inspections, suddenly were rendered unconstitutional. This article reviews that decision and discusses the developments that have occurred in this area during the past year.

Until recently, hotels in many jurisdictions routinely provided the police with access to their guest registers without much concern about the privacy issues that might be involved. After all, numerous cities and towns possessed ordinances that required hotels to collect specific guest information and allowed the police inspect the information upon request. A failure to allow access could result in a fine or in some cases, jail time.

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EEO-1 Amendments on Pause, Working Families Flexibility Act May Convert Overtime to Comp Time, Update on Proposed Change to Federal Overtime Regulations, and more.

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Legal Alert - Day of Rest

May 7, 2017

Category: Publications

Mendoza (Christopher) V. Nordstrom, Inc. (Gordon, Intervener)

This case was brought in California state court, then Nordstrom removed to federal court. Most California employers have operated under the assumption that they could assign work to employees for seven or more consecutive days so long as they paid the overtime premiums.

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This quarter’s newsletter includes useful information about Federal and California law updates.

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EEOC on Retaliation, Class Action Waivers and the NLRA, New Information for EEO-1 Filings, and more.

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LOS ANGELES, CA (8/8/16): In a two-week arbitration before retired Judge Luis Cardenas, the Stokes Wagner team successfully defeated the claims of Nino O’Brien, former sommelier at the legendary Polo Lounge at the Beverly Hills Hotel. Mr. O’Brien claimed he was improperly classified as a manager since the start of his employment in 2008 and, therefore, was owed $216,743.57 for unpaid overtime, missed meal and rest breaks, and liquidated damages. 

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LOS ANGELES, CA (6/14/16): After a three-week trial, a Los Angeles jury returned a rare defense verdict in favor of Hotel Bel-Air and its Wolfgang Puck Restaurant. Seeking $5.1 Million in compensatory damages plus punitive damages, Carney Shegerian and his team of three lawyers and other technical support staff – California plaintiffs’ attorneys advertising a 95% success rate – was defeated by Stokes Wagner, including Arch Stokes, Peter Maretz, Diana Dowell, Adam Parry, Shirley Gauvin and paralegal Eleanor McCloskey. Mr. Stokes asked the jury to award Zero, and that is what they did.

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LOS ANGELES, CA (8/5/14): A Los Angeles Superior Court Jury rendered a verdict in favor of The Beverly Hills Hotel and its former General Manager Alberto del Hoyo, defendants in a lawsuit by former Area Director of Sales Tim Dupree, Sommelier Niño O’Brien and former Hostess Wendy Giron. Plaintiffs sought $12.5 million in economic, emotional distress and punitive damages. The jury awarded the plaintiffs nothing. 

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